Volume car makers face eurozone earnings split

BERLIN (Reuters) - Results from European mass-market car makers this week are set to mirror the region's debt crisis as Germany's Volkswagen weathers the deepening slump while peers PSA Peugeot Citroen, Renault and Fiat struggle with plunging Mediterranean sales.

Second-quarter results may prove as varied as economic cycles in the region, where Germany is showing greater resilience to the malaise than the euro zone as a whole.

The North-South divide is even apparent within VW's own multi-brand portfolio, where loss-making Spanish division Seat contrasts growing profits for the Audi and Skoda badges. VW's six-month group sales in the EU eased only 1.5 percent, whereas Renault and Fiat both plunged 17.1 percent.

Major automakers' results will highlight a deepening "divergence of fortunes" in Europe, Singapore-based Bernstein analyst Max Warburton wrote in a research note on Monday. "The rich get richer while the poor get poorer."

European car sales fell almost 7 percent in the first half of the year as Germany, the region's biggest market, pulled in a small gain while France, Italy and Spain posted declines at, or near, double-digit levels.

Benefiting from its broad presence in lucrative markets such as China, the United States and Brazil, VW has continued to add staff and set up new plants. It also aims to complete the integration of sports-car maker Porsche on August 1. Second-quarter operating profit may edge up 1 percent to 3.2 billion euros ($3.88 billion), a Reuters poll suggested on Monday. VW reports its results on Thursday.

By contrast, Peugeot , overly exposed to shrinking southern European markets, has already flagged a first-half net loss and said that its manufacturing division was burning 200 million euros a month. It said that the auto division's first-half operating loss would be 700 million euros.

Battling overcapacity that analysts have pegged at 20 percent across Europe's auto industry, the region's No. 2 car maker plans to weed out 8,000 jobs and close a plant near Paris. Peugeot, which lacks the support of a low-cost brand such as Renault's Dacia, will release earnings figures on Wednesday.

"Peugeot's situation looks desperate," Warburton said.

French peer Renault is also wrestling with sagging demand and overcapacity, but it does have profitable international operations, especially in Russia and Brazil. Renault, which has not given a profit target for this year, is expected by analysts to post a very small first-half gain on Friday.

Fiat , due to publish results next week, may be able to reduce losses through cost-cutting measures in Europe and improved conditions in Brazil.

Renault and Fiat are already reducing headcount, while General Motors' European Opel division plans to close its Bochum plant in Germany by 2017 and speed its restructuring to cut losses of $3.5 billion over the past three years.

Second-quarter results will follow "the pattern evident at Singaporean used-car lots and all over the world -- people want German cars and Japanese cars," Warburton wrote in his note. "The French and Fiat will yet again present a stark contrast."